Weekly Feed Market Commentary
Published 22 October 14
Global grain prices received a certain amount of support last week as the wet weather in the US grain belt hampered maize harvest progress; Dec-14 Chicago maize futures prices reached highs not seen since the beginning of September. However, forecasts of drier weather in the US this week resulted in maize prices losing the upward momentum towards the end of last week.
The support filtered into the UK feed wheat futures market, as prices increased by £3.80/t from Monday – Friday last week, closing at £116.45 on Friday (17 Oct). UK feed wheat futures price dipped at the beginning of this week (£115.50/t on Monday), before gaining again on Tuesday, to close at £116.50/t (21 Oct). On Tuesday, Dec-14 Chicago wheat futures prices closed at $190.77/t, a level not seen since 10 September.
Provisional figures released by Defra last week (16 Oct) for 2014 UK crop area and yields, confirmed historically high yields. Record yields for wheat (8.6 t/ha) and barley (6.5 t/ha) were reported, as well as the second highest yields on record for oats (6.1 t/ha).
UK trade data for August also released last week by HMR&C (15 Oct), revealed that the UK was still a net importer of wheat in August, but exports appeared to be climbing. In August, the UK exported 130Kt of wheat, up from just 12Kt in July. The August trade data was further confirmation of the need to step-up the pace of the UK wheat export campaign in order to avoid a large build-up of stocks.
Estimates for EU soft wheat, barley and maize production were all increased in the October edition of Strategie Grains’ grain report, resulting in an upward revision to total grain production this year to a record high of 322Mt (up from 319Mt last month). The private analysts also presented their initial estimates for the 2015 EU harvest area. While these first estimates should be treated with caution, they predict a reduction to the total EU cereals acreage next year, because of decreased winter barley and maize areas.
Weather is a key driver of oilseed prices currently, with the US soyabean and Canadian canola (rapeseed) harvests behind schedule and soyabean crops being planted in South America. In Argentina, the Buenos Aires Grain Exchange forecast an uplift to the 2014/15 soyabean area of 1.2%, to a record 20.6Mha.
Paris rapeseed futures (Nov-14) remained fairly stable throughout the last week, fluctuating around the €322/t level. After dropping at the beginning of this week, to €317.75/t (20 Oct), prices have once again returned to near last week’s levels, settling at €320.25/t on Tuesday (21 Oct). Rapemeal (34%, ex-mill, Erith, October delivery) was reported at £160.00/t on Friday (17 Oct), up £2.00/t on the previous week. The Hi-Pro soyameal price (ex-store, East Coast, October delivery) was unchanged again on Friday, at £318.00/t.
Provisional estimates from Defra showed that UK oilseed rape yields for the 2014 harvest were, at 3.7 t/ha, the second highest on record behind 2011. The oilseed rape harvest is up 17% on last year amounting to 2.5Mt, despite a 5.8% reduction to the total area of oilseed rape to 674Kha.
Figures and commentary provided in association with HGCA and BPEX.
For further information on the cereals market click here to link through to HGCA website.